"Protecting Tenants Over Private Property Rights"... Is Byeon Chang-heum's Solution to the Jeonse Crisis Effective?

Explanation of Solutions During the 2010-2011 Jeonse Crisis
Tenant Protection and Recovery of Unearned Income Advocated

Minister of Land, Infrastructure and Transport nominee Byeon Chang-heum is arriving at the Seoul Regional Land Management Office in Gwacheon on the morning of the 7th. (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] Despite the government's successive measures, the steep rise in jeonse and monthly rent prices continues, drawing attention to the related policies likely to be presented by nominee Byeon Chang-heum, Minister of Land, Infrastructure and Transport, during the confirmation hearing. Considering the market situation, stabilizing the jeonse and monthly rent market is the top priority task that nominee Byeon must address.

According to industry sources on the 9th, nominee Byeon is expected to focus his policies more on protecting tenants' rights rather than landlords' private property rights, and on supplying public rental or public owner-occupied housing rather than sale housing.

Nominee Byeon mentioned solutions to the jeonse crisis several times during National Assembly forums in 2010-2011, when the jeonse shortage was severe, especially in Seoul and the metropolitan area, during the Lee Myung-bak administration. According to KB Kookmin Bank’s Real Estate Live On statistics, the apartment jeonse price increase rate in Seoul was 0.76% in August 2009 and 0.64% in February and September 2011, similar to recent trends.

At that time, Byeon, a professor of public administration at Sejong University, participated in a policy forum on the jeonse crisis hosted by Jinbo Party lawmaker Cho Seung-soo in November 2010, explaining the direction and tasks of housing policy. He criticized the Lee Myung-bak administration for failing to curb the jeonse price surge and emphasized that housing policies focused on sales and supply would struggle to achieve housing stability. He explained that reducing the proportion of rental housing and expanding large-scale sale apartments were causes of the jeonse shortage.

Nominee Byeon's policy direction focused on tenant protection, realization of the one household one house principle, utilization of rental housing, and housing welfare policies. These align mostly with policies promoted during Minister Kim Hyun-mi’s tenure, such as the jeonse and monthly rent price ceiling system and the right to request contract renewal. He also emphasized the need to expand purchased rental housing mentioned in the November 19 jeonse measures. At that time, Byeon explained, "It is necessary to provide tax benefits when multi-homeowners sell houses to public institutions."

Since nominee Byeon emphasized tenant protection policies such as the Jeonse Deposit Guarantee Center and contract rental housing system since his academic days, the possibility of revising the three lease laws is low. He also expressed a positive stance on expanding monthly rent income deductions, which Minister Kim Hyun-mi mentioned during the October National Assembly audit, aiming to reduce the housing cost burden on low-income households caused by the shift from jeonse to monthly rent.

However, contrary to the recent government and ruling party perception, he expressed a negative view on the shift to monthly rent. He stated, "The jeonse system can contribute more significantly to housing stability than monthly rent," and added, "The taxation system on jeonse and monthly rent income should be comprehensively reviewed to maintain the jeonse system." He also showed a somewhat negative stance on the registered rental housing system, which was effectively abolished in the July 10 measures, suggesting that regulatory easing is unlikely in the future.

Since the real estate situation at the time of these remarks differs from the current one, not all will be reflected in policy, but considering nominee Byeon's awareness and views, it is highly likely that the measures will strengthen and supplement the currently promoted real estate policies. In fact, nominee Byeon is known to have a deep interest in recovering unearned income, similar to the theory of 19th-century American economist Henry George, the pioneer of the land public concept. In a 2015 media interview, he explained that reading Henry George's book "Progress and Poverty" motivated him to study real estate issues.

However, experts predict that nominee Byeon will not be able to present a quick solution to the jeonse and monthly rent shortage. Professor Lim Jae-man of Sejong University explained, "To resolve the jeonse shortage, either private rental housing supply must increase or the public sector must expand supply, but this is difficult under the current policy direction."

This content was produced with the assistance of AI translation services.